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Chinese airlines claim compensation from Boeing over 737 MAX

PEKING (Reuters) – The three largest Chinese airlines have asked US aircraft maker Boeing Co to compensate for the losses caused by the ground-based landing and late delivery of 737 MAX jets.

FILE PHOTO: The Boeing logo is displayed at the Latin American Business Aviation Fair (LABACE) at Congonhas Airport in Sao Paulo, Brazil, August 14, 2018. REUTERS / Paulo Whitaker / File Photo

Air The spokespersons of China Ltd and China Southern Airlines Co Ltd told Reuters on Wednesday that the pair had approved a request from China Eastern Airlines Corp. Ltd announced a day earlier.

The latest requests were first reported by Chinese state television.

China was the first country to dump the 737 MAX worldwide after 157 people died in a crash in Ethiopia in March. This was the second such incident for Boeing's latest aircraft.

"China has hit 96 planes off the ground, about 4 percent of its aircraft. Grounding causes enormous losses for Chinese airlines, "said Chinese aviation expert Li Xiaojin to Reuters.

Li estimates that the daily losses for each airline amount to at least 100,000 yuan ($ 14,469.90) per aircraft.

"The potential costs are also enormous. The slower passenger growth at the main Chinese airports in March and April was, according to my calculations, mainly due to the landing of 737 MAX jets, "Li said.

Airlines outside China have also asked for compensation from Boeing, including Turkish Airlines, United Airlines, Ryanair and Flydubai.


Compensation claims come as China and the United States are involved in an escalating trade war, accusing Beijing of having reversed almost all aspects of a proposed trade agreement.

The US government has since imposed tariffs on $ 200 billion of Chinese imports, specifying more, raising fears that China might avenge US companies.

Bloomberg reported last week that major Chinese airlines were considering joining forces to seek compensation. The state daily People's Daily said on Tuesday that China Eastern had not communicated with other airlines on the issue prior to its request. China Eastern confirmed its comments in the report to Reuters.

The most recent requests came a day before the Federal Aviation Administration invited global regulators in Dallas to review Boeing's 737 MAX software and training proposals before regulators decide if and when the two-month pledge is made should be terminated.

China and the European Union each have their own aerospace industries and are expected to set their own terms for the resumption of 737 MAX flights, analysts said.

The International Air Transport Association convened a meeting of airlines with 737 MAX jets in Montreal on Thursday.

Reporting by Stella Qiu and Brenda Goh; Editing by Himani Sarkar and Christopher Cushing

Our Standards: The Thomson Reuters Trust Principles.

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